Sri Lankan shares end at over 3-month low

Reuters: Sri Lankan shares closed at their lowest level in more than three months on Monday, falling for a fifth straight session as investors awaited cues from government policies and budget, brokers said.

The main stock index ended 0.05 percent, or 3.39 points, weaker at 7,017.35, its lowest close since July 13.

"There is no excitement. There is a lot of clutter regarding what to expect from the budget," said Danushka Samarasinghe, research head at Softlogic stockbrokers.

"The uncertainties have hit the market and created negative sentiment," Samarasinghe said.

Analysts said investors were cautious ahead of Prime Minister Ranil Wickremesinghe's policy statement next month outlining his government's economic priorities ahead of 2016 budget announcement scheduled in the third week of November.

Analysts said a government's move to implement a budget proposal of a retrospective tax targeting corporate is the main concern for investors.

Turnover stood at 1.2 billion rupees ($8.5 million), compared with this year's daily average of 1.1 billion rupees.

Foreign investors were net sellers of 174.4 million rupees worth of shares on Monday, extending the year to date net foreign outflow to 2.91 billion rupees worth of equities.

Shares of Cargills (Ceylon) Plc fell 7.31 percent while Sri Lanka Telecom Plc declined 1.66 percent, dragging the main index. 

($1 = 140.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

CSE to promote Sri Lanka with Zurich, London roadshows this month

(LBO) – The Colombo Stock Exchange will promote the Sri Lankan market with two roadshows in Zurich and London this month.

A breakfast meeting in Zurich on October 28 and an investor forum in London on October 29-30 will have representatives of Sri Lankan brokerages and the financial sector with the attendance of Finance Minister Ravi Karunanayake.

Four investor forums were held in 2014 in Singapore, London, New York and Colombo which brought together capital market participants and institutional investors.

“Sri Lanka’s economy has been on an upward trajectory since the end of the three-decade civil war in May 2009. This significant growth has been a result of the peace dividend, along with subsequently introduced well-executed development plans,” the CSE said promoting the forum.

“Sri Lanka currently boasts South Asia’s highest GDP growth, conducive fiscal and monetary policy, and favorable socio-economic conditions, which together create an attractive investment destination.”

Although it seems current data is being uploaded to the forum site, the Sri Lanka market is well positioned to benefit from political stability after elections in August and a peace dividend after the end of the war with Tamil Tiger separatists.

Sri Lanka to call for monorail proposals this month

ECONOMYNEXT – Sri Lanka’s new government will make a request for proposals to build a monorail or mass rapid transit system (MRT) for the capital Colombo this month, the head of the investment promotion agency said.

“RFPs for the monorail project will be out within the next 10 days,” said Upul Jayasuriya, chairman of the Board of Investment.

The transport system proposed to be built will be either a monorail or MRT and will take four years to come into operation, he told reporters at a forum organized by the Sri Lanka – Germany Business Council of the Ceylon Chamber of Commerce.

The project’s cost has been estimated at 1.9 billion US dollars by the Japan International Co-operation Agency which has helped the island develop a transportation master plan.

Jayasuriya said the project will be done on a build-operate-transfer basis with “no financial drain on the government.”

Sri Lanka to raise Treasury bill limit by Rs400bn

ECONOMYNEXT - Sri Lanka plans to raise the limit on issuing Treasury bills by 400 billion rupees in a resolution to be presented to parliament on October 20.

The Treasury has fully sold the existing 850 billion rupees of Treasuries.

Over 200 billion rupees of the bills have been bought by the Central Bank to inject liquidity in to the banking system and generate balance of payments pressure.

Several tax bills including controversial retrospective and one-off taxes are to be presented to parliament.

Attempts to raise the T-bill limit and controversial taxes failed earlier this year due to a lack of a parliamentary majority.

90% LTV from today; Ravi K instructs CB

Assures of unchanged taxes on vehicles from the budget

In an interesting turn of events, Finance Minister Ravi Karunanayake has sent formal instructions to the Central Bank asking the monetary authority to revise the vehicle financing Loan-To-Value (LTV) up to 90 percent from the current 70 percent with effect from today. 

 Karunanayake yesterday told Mirror Business that the 90 percent LTV would be effective from today but the banking and financial sector is yet to receive the formal directive from the Central Bank. 

 The October monetary policy review is due tomorrow (October 20) and it is expected that the change to be announced with the policy review. 

 Last week, Karunanayake came under flack for misleading the public for his statement on increasing the LTV up to 90 percent as the Central Bank denied of receiving formal instructions to effect the change. 

 The new development is coming into effect after Karunanayake met the vehicle importers last Friday (October 16) at the ministry premises where he had given his assurance to that effect and had also promised to rectify a host of other hardships faced by the vehicle importers. 

“He confided us that the vehicle LTV would definitely be brought up to 90 percent level as he asserted earlier and the necessary instructions to that effect to be sent to the Central Bank within a couple of days,” said the President of the Vehicle Importers Association of Lanka (VIAL), Indika Sampath Merenchige. 

 Last week, the Central Bank Deputy Governor, Ananda Silva said a final decision on the LTV could only be taken by the monetary board and hence the earlier directive issued on September 14 imposing a 70 percent LTV still prevails. 

Apart from the increasing of the LTV, the Finance Minister will also send instructions to the Central Bank on the need to have the 100 percent Letter of Credit (LC) margin to curtail the vehicle imports. 

 “It was also informed (by the minister) that there would be no changes in taxes or in other matters relating to vehicle imports before the budget or from the budget to be presented (on November 22),” Merenchige said in a statement sent to his members after the meeting. 

 The minister has also assured that no changes in the tax structure impacting the vehicles would be brought in until the budget to be presented next year (for the fiscal year 2017). www.dailymirror.lk